nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2015‒07‒11
nine papers chosen by
Yuji Tamura
La Trobe University

  1. 30 Years of Schengen: Internal blessing, external curse? By Ademmer, Esther; Barsbai, Toman; Lücke, Matthias; Stöhr, Tobias
  2. The more the merrier? Migration and Convergence among European Regions By Lorenz B. Fischer; Michael Pfaffermayr
  3. The Labor Market Effects of Opening the Border: New Evidence from Switzerland By Andreas Beerli; Giovanni Peri
  4. Migration Outflows and Optimal Migration Policy: Rules versus Discretion By Ismaël ISSIFOU; Francesco MAGRIS
  5. The Selection of High-Skilled Migrants By Parey, Matthias; Ruhose, Jens; Waldinger, Fabian; Netz, Nicolai
  6. Effectively Opening Labor and Capital Markets: The interplay among foreign direct investment, trade, and immigration By TOMOHARA Akinori
  7. The Role of Foreign Networks for Firm Export of Services By Hatzigeorgiou, Andreas; Lodefalk, Magnus
  8. Relaxing Migration Constraints for Rural Households By Cynthia Kinnan; Shing-Yi Wang; Yongxiang Wang
  9. Remittances and Relative Concerns in Rural China By Akay, Alpaslan; Bargain, Olivier; Giulietti, Corrado; Robalino, Juan David; Zimmermann, Klaus F.

  1. By: Ademmer, Esther; Barsbai, Toman; Lücke, Matthias; Stöhr, Tobias
    Abstract: We take stock of the Schengen Agreement that celebrated its 30th birthday on June 14th, 2015. We argue that the abolition of internal border controls in most European Union member states is rightly considered a blessing to EU citizens. Internally, the Agreement facilitates social and economic interactions without impeding the security of EU citizens. Externally, the Schengen Agreement has also helped to spread liberal norms and promote EU policies across EU borders, whenever Schengen borders prove permeable enough to allow for legal migration or if the relaxation of Schengen visa requirements is used as a carrot to trigger reforms in EU candidate and neighboring countries. The recent humanitarian crisis at the EU borders reveals that the Schengen system still lacks an appropriate joint asylum policy to counterbalance the loss of internal border controls. This weakness may undermine one of the main achievements of European integration. This Policy Brief revisits the accomplishments of 30 years of Schengen. We first ask how Schengen has affected member states and their citizens and which effects it has exerted on non-Schengen states outside of the EU's borders. We subsequently elaborate on appropriate reforms of a communitarized asylum policy that is needed to safeguard the accomplishments of the Schengen Agreement in the future.
    Date: 2015
  2. By: Lorenz B. Fischer; Michael Pfaffermayr
    Abstract: Using a spatial systems estimator to incorporate spatial interactions and endogeneity of income levels and migration, this paper finds a positive effect of migration on cohesion within the European Union on the NUTS 2 level. As migration can generally be observed from low to high income regions, growth rates of income per worker tend to decrease in regions experiencing net immigration, while lagging regions experience higher speeds of income convergence. As a result, migration increases sigma-convergence. Results show an increase of more than one third. Free movement of persons also proves to increase efficiency, displayed by higher average convergence speeds.
    Keywords: Conditional spatial beta- and sigma-convergence, Migration, Spatial Solow model, European regions
    JEL: R11 C31 O47
    Date: 2015–07
  3. By: Andreas Beerli; Giovanni Peri
    Abstract: Between 1999 and 2007 Switzerland opened its labor markets to immigrants from the European Union (EU), fully liberalizing access by 2007. The timing of this labor market liberalization differed by geography, however. In particular, cross-border workers, who constituted more than half of EU immigrants, were allowed free-entry into the border region (BR), but not the non-border region (NBR), already in 2004. In this paper, we exploit the different timing of these policies in a difference-in-difference approach and estimate the effects of the policy changes on the inflow of new immigrants and on native labor market outcomes such as wages and employment by comparing the BR and NBR. We find that opening the border to EU immigrants increased their presence by 4 percent of employment, and this had no significant impact on average native wages and employment. Decomposing the effect between skill groups we find that immigrants complemented highly educated native workers, while they displaced middle educated workers and had no effect on less educated.
    JEL: J2 J24 J61
    Date: 2015–07
  4. By: Ismaël ISSIFOU; Francesco MAGRIS
    Date: 2015
  5. By: Parey, Matthias (University of Essex); Ruhose, Jens (Ifo Institute for Economic Research); Waldinger, Fabian (University of Warwick); Netz, Nicolai (DZHW-German Centre for Research on Higher Education and Science Studies)
    Abstract: We measure selection of high-skilled migrants from Germany using predicted earnings. Migrants to less equal countries are positively selected relative to non-migrants, while migrants to more equal countries are negatively selected, consistent with the prediction in Borjas (1987). Positive selection to less equal countries is driven by university quality and grades, and negative selection to more equal countries by university subject and gender. Migrants to the U.S. are highly positively selected and concentrated in STEM fields. Our results highlight the relevance of the Borjas model for high-skilled individuals when credit constraints and other migration barriers are unlikely to be binding.
    Keywords: international migration, high-skilled migrants, selection, inequality, Roy/Borjas model
    JEL: F22 J24 J31 J61
    Date: 2015–06
  6. By: TOMOHARA Akinori
    Abstract: This paper presents a study of the dynamic interactions of two policies—inward foreign direct investment (FDI) promotion and immigration enhancement—together with choices of trade or FDI. Despite growing concern about FDI-migration relationships, the literature has not explored the dynamic interactions among FDI, trade, and immigration. Our analysis distinguishes the different effects of immigration from short-run and long-run perspectives and shows that larger immigration stocks induce FDI inflows, although immigration flows are substitutable for FDI inflows. Additionally, skilled (unskilled) immigration flows are complementary to (substitutable for) FDI inflows. Furthermore, the relative importance of FDI inflows increases compared to imports when skilled immigration flows increase. While the two policies are often suggested to resolve shortages of domestic savings and labor, our results have implications on how to tackle the increasingly daunting policy issue of population aging.
    Date: 2015–07
  7. By: Hatzigeorgiou, Andreas (The Ratio Institute); Lodefalk, Magnus (Örebro University School of Business)
    Abstract: This study formalizes the idea that that the world can become ‘smaller’ through firms’ strategic trade-related decisions. We investigate whether firm investment in obtaining access to foreign networks impacts exports of services by estimating a fixed effects panel model on a comprehensive firm-level dataset for Sweden. In particular, we examine investment in links through the hiring of immigrants. Because trade barriers are higher for services than for goods, and because trade in services is more sensitive to informal trade barriers, firm investment in access to foreign networks could especially help to increase services exports. However, investment in foreign links could benefit overall access within the same cluster of firms, which reduces the incentive for an individual firm to invest in such linkages itself. The novel results suggest a positive and significant influence of firm investment in foreign networks – through the hiring of foreign-born workers – on both the propensity to export services as well as the intensity of exports. Instrumental variable estimation mitigates endogeneity concerns. Weaker export experience enhances the role of investment in foreign networks in terms of the propensity to export. The skill level of foreignborn workers and the time that has elapsed since immigration also impact the degree to which firms can utilize investment in foreign-born personnel to gain access to networks abroad. Our findings provide a new understanding of how firms can overcome trade barriers that specifically impede services by investing in foreign networks, such as through hiring foreign-born personnel, and emphasize the role of foreign-born population to promote services exports.
    Keywords: networks; firms; trade; services; immigration
    JEL: D80 F10 F22 J61 L14
    Date: 2015–06–29
  8. By: Cynthia Kinnan; Shing-Yi Wang; Yongxiang Wang
    Abstract: There are an estimated 750 million internal migrants in the world, yet the effects of access to internal migration for rural households are not well understood. Internal migrants may provide wealth transfers, insurance or credit to households remaining in rural areas. This paper exploits two unique features of China's history to study the impact of relaxing migration constraints on the outcomes and choices of agricultural households: reforms to the household registration (hukou) system that relaxed restrictions on migration, and historical, centrally-planned migration flows. We show that historical flows of temporary migration due to a government policy called the "sent-down youth" (SDY) program created lasting inter-province links, so that decades later, reforms to the hukou system in cities which sent SDY increased migration in provinces where those SDY were sent. Using this variation, we find that improved access to migration leads to higher levels of consumption and lower consumption volatility for rural households. Furthermore, household production decisions change, with a shift into high-risk, high-return activities including animal husbandry and fruit farming.
    JEL: O15
    Date: 2015–07
  9. By: Akay, Alpaslan (University of Gothenburg); Bargain, Olivier (University of Aix-Marseille II); Giulietti, Corrado (IZA); Robalino, Juan David (Cornell University); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: The paper investigates the impact of remittances on the relative concerns of households in rural China. Using the Rural to Urban Migration in China (RUMiC) dataset we estimate a series of well-being functions to simultaneously explore the relative concerns with respect to income and remittances. Our results show that although rural households experience substantial utility loss due to income comparisons, they gain utility by comparing their remittances with those received by their reference group. In other words, we find evidence of a "status-effect" with respect to income and of a "signal-effect" with respect to remittances. The magnitudes of these two opposite effects are very similar, implying that the utility reduction due to relative income is compensated by the utility gain due to relative remittances. This finding is robust to various specifications, controlling for the endogeneity of remittances and selective migration, as well as a measure of current migrants' net remittances calculated using counterfactual income and expenditures.
    Keywords: positional concerns, remittances, subjective well-being
    JEL: C90 D63
    Date: 2015–06

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